Lynas: Profits, politics & people

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As the September dateline for the renewal of Lynas Corporation’s licence draws closer, a well-orchestrated campaign is underway to swing support in favour of the Australian rare earth producer. The campaign seeks to shift the narrative from the controversial issue of toxic waste to the economic benefits and strategic importance of the rare earths industry.

Rare earths are considered strategic material, essential to a whole range of industries including electric cars, electronics, and oil and gas.  China currently dominates the industry, producing more than 80% of the world’s supply.

Bumiputra policy

Earlier this week, the “Malaysian Global Business Forum” (MGBF) hosted what it called a “high-level roundtable to discuss the future of the rare earth industry in Malaysia.” Mohd Redzuan bin Md Yusof, the Minister of Entrepreneur Development (and Lynas Corp’s chief trumpet blower in cabinet) delivered the keynote address.

Listening to him, one would be forgiven for thinking that Malaysia’s very future is now dependent upon the rare earth industry centred around Lynas, of course. In a nod to Malaysia’s racial politics, the “already significant Bumiputera participation in rare earth processing through Lynas where more than 90% of the staff are Malays” is being highlighted.

Interestingly, the Malaysian Global Business Forum (MGBF) is itself something of a mystery. Its name suggests that it is a grouping of local and foreign businesses in Malaysia but its website does not identify any of its officials, its membership or its office address. It is only contactable through Glenreagh Sdn Bhd which is run by an Australian businessman living in Malaysia.

One of MGBF’s “partners/associates” – PR Newswire – is listed as a subsidiary of a big US-based PR company incorporated in the Cayman Islands. PR Newswire, which appears to be MGBF’s media advisers, is actively pushing the fairy tale that Lynas could become the centrepiece of Malaysia’s rare earth industry.

Interestingly, Redzuan echoed the same theme in his keynote address. He also intimated that unspecified investors were eager to invest up to RM100 billion in the industry’s downstream processing over the next ten years “once the government makes clear how it intends to regulate the industry.” In other words, RM100 billion of investments is suddenly contingent upon Lynas getting its licence approved. How convenient!

Geopolitics

Of course, geopolitics is also involved. Countries like the US and Japan worry about becoming too dependent on a strategic rival like China and are keen to see Lynas develop as an alternative source of supply. In this context, the view is being put forward that Malaysia has a special geopolitical role to play in the supply of rare earths.

Japan, which is the biggest importer of rare earths, is thought to be actively involved in lobbying for Lynas. A major financial backer of Lynas, it recently signed an agreement under which Lynas would supply Japan 7,200 tons of rare earths a year until 2038.  No surprise then that Japan is using its not inconsiderable influence to quietly pressure Malaysia into allowing Lynas to continue. It is not coincidental that Prime Minister Dr Mahathir Mohammad gave his rather infamous seemingly unconditional approval for Lynas to continue to operate in Malaysia while on a visit to Tokyo.

Of course, having left a terrible legacy of its own in Bukit Merah more than 30 years ago, Japan is understandably very low-key about its involvement in yet another rare earth processing facility in Malaysia.

As part of the scaremongering tactics being employed, one academic recently warned that relations with Japan, including economic assistance, could suffer if the Lynas plant is shuttered.

People first

Clearly, powerful nations and business interests are involved in a slick, foreign-directed PR campaign to pressure the government to allow Lynas to continue operating in Malaysia notwithstanding the toxic waste issue. If this self-serving PR campaign is to be believed, good relations with Japan and Australia, billions in new investments, the advancement of the Bumiputera agenda and thousands of jobs are now suddenly dependent on Lynas being able to operate here, toxic waste and all.

The government, however, must not compromise on the issue of toxic waste. In the end, only one thing ought to matter to Putrajaya – the health and safety of the people of Malaysia. It is wonderful that Lynas employs many Bumiputeras but let’s not forget it is mostly Bumiputeras who would be adversely affected by toxic waste that Lynas produces.

Lynas and its backers are free as well to promote the company as a strategic alternative to China but the people of Malaysia shouldn’t be asked to pay the price for it in terms of health risks and environmental degradation. If Lynas is of such great strategic importance to the entire free world, perhaps countries like Japan, the US and Australia should share the burden by at least agreeing to store the toxic waste (now amounting to more than 450,000 tons) in their own countries instead of dumping it here.

In recent months, Malaysians have become increasingly aware of the dangers posed by toxic waste with schoolchildren the biggest victims. It is a harbinger of what is to come if the people themselves do not demand that the government they voted into office do far more to protect their environment. If the government fails to do its duty, the people must be ready to take to the streets once again to make their voices heard. Putrajaya must understand that the health, safety and well-being of Malaysians must take priority over geopolitics, foreign corporations or profits.

[Dennis Ignatius | Kuala Lumpur |12th July 2019]